GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2020

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and Other Intangible Assets

NOTE 7—GOODWILL AND OTHER INTANGIBLE ASSETS

Activity related to goodwill for the six months ended June 30, 2020 and 2019 follows:

	For the six months ended
	June 30,
Roll Forward of Goodwill (in thousands)	2020		2019
Beginning balance	$	180,424	$	173,904
Additions from acquisitions		68,534		6,520
Impairment		—		—
Ending balance	$	248,958	$	180,424

The additions from acquisitions shown in the table above during the six months ended June 30, 2020 relate to the purchases of certain assets and the assumption of certain liabilities from three debt brokerage companies for aggregate consideration of $69.4 million, which consisted of cash of $46.8 million, $5.0 million of the Company’s stock, and $17.6 million of contingent consideration. The contingent consideration may be earned over either a four-year period or five-year period after the closing of each acquisition, provided certain revenue targets have been met. The contingent consideration included for the acquisitions is non-cash consideration and thus not reflected in the amount of cash consideration paid in the Condensed Consolidated Statement of Cash Flows. The Company estimated the fair value of the contingent consideration using a probability-based, discounted cash flow estimate for the revenue targets (Level 3).

The acquired businesses operate in the Columbus, Ohio and New York City metropolitan areas. These acquisitions expand the Company’s network of loan originators and geographical reach and provide further diversification to its loan origination platform. Substantially all of the value associated with the acquisitions was related to the assembled workforces and commercial lending platform, resulting in substantially all of the consideration being allocated to goodwill. The Company expects all goodwill to be tax deductible, with the tax-deductible amount of goodwill related to the contingent consideration to be determined once the cash payments to settle the contingent consideration are made. The other assets acquired and the liabilities assumed were immaterial. The operations of these three companies have since been merged into the Company’s existing operations. The goodwill resulting from the acquisitions is allocated to the Company’s single reporting unit. The purchase accounting for the three acquisitions has been completed as of June 30, 2020.

As of June 30, 2020 and December 31, 2019, the balance of intangible assets acquired from acquisitions totaled $2.2 million and $2.5 million, respectively. As of June 30, 2020, the weighted-average period over which the Company expects the intangible assets to be amortized is 4.3 years.

A summary of the Company’s contingent consideration liabilities, which is included in Other liabilities, as of and for the six months ended June 30, 2020 and 2019 follows:

	For the six months ended
	June 30,
Roll Forward of Contingent Consideration Liabilities (in thousands)	2020		2019
Beginning balance	$	5,752	$	11,630
Additions		17,649		—
Accretion		497		286
Payments		(5,800)		(6,450)
Ending balance	$	18,098	$	5,466

The contingent consideration liabilities above relate to acquisitions completed in 2017 and 2020. The last of the five earn-out periods related to these contingent consideration liabilities ends in the second quarter of 2025.